How to tie up 1M property with 100K? - Posted by Brian,WI
Posted by Brian,WI on July 31, 2003 at 18:44:02:
The attorney I’m using to keep fighting an “award” from a city that “took” a property of mine, knows I have (so far) $100,000 cash from that building. At a recent court hearing he said…“You know, you can probably control $1,000,000 in property with that”.
That’s great, I just want to make sure I go in the right direction.
Now we all know 10% of 1 million is $100,000. But how do you get financing with only 10% down on a large building? I’m guessing I would use MY $100,000 and then ask the seller for a second mortgage for $100,000, which would then bring me up to the more conventional 20%, BUT, will I find bank financing on a large deal, with only 20% down when done that way?
Assuming this is all correct and I find a property AND seller that will do this, the only way it would work would STILL be to buy undermarket value correct?, because the Adjusted Gross Rental Income would still have to pay all the expenses ALONG with the 1st mortgage of 900,000 PLUS the sellers 2nd mortgage of $100,000.
Just today I got a fax from a broker on a $1,200,000 24 unit building. Their Net Operating Income is $87,268, which is low for the price. I guess the only thing to do now would be contact the broker to see how flexable the seller is with price and terms and go from there, OR is there anything else I’m missing or should be doing?
Thank you so much.
(June 2002 Lenders workshop attendee, so you think I should know this )